In a high-stakes sting operation, Hong Kong authorities have busted a $15 million crypto-powered money laundering network, arresting 12 suspects and seizing mountains of cash and digital evidence.
The joint operation, executed on May 15, unraveled a sophisticated cross-border laundering ring that funneled dirty money through over 500 bank accounts and converted it into crypto at local exchange shops. The syndicate operated out of a rented apartment in Mong Kok—a quiet residential neighborhood turned financial crime HQ.
How the Scam Worked
The suspects allegedly recruited individuals—often friends and family—to open “stooge” bank accounts. These accounts were used to receive funds linked to various fraud schemes. Once in, the money was swiftly converted into cryptocurrency through physical exchange shops in districts like Tsim Sha Tsui—helping to erase its shady origins.
Of the $15 million laundered (HK$118 million), authorities traced over $1.2 million back to 58 individual fraud cases.
Busted in Real Time
Police surveillance on May 15 caught two syndicate recruits in the act: one visited a bank, the other an ATM—before both converged at a crypto exchange shop to convert the cash. Officers swooped in, seizing HK$770,000 (around $98,540) in cash before it could disappear on the blockchain.
Soon after, authorities arrested 10 more individuals, aged 20 to 41, in coordinated raids across Hong Kong and mainland China.
In total, the haul included:
HK$1.05 million ($134,370) in cash
Over 560 ATM cards
Numerous mobile phones
Crypto transaction records
Bank documents
Laundering Goes Social
Senior Inspector Tse Ka-lun of the Commercial Crime Bureau revealed that many of the launderers used bank accounts belonging to friends and family—often without them realizing the true scale of the operation.
Hong Kong has seen a sharp rise in fraud, with a 12% year-on-year increase in 2024. The police have made over 10,000 fraud-related arrests, and a staggering 73% of those involved stooge bank accounts.
Tightening the Net
This crackdown comes as Hong Kong ramps up its regulatory efforts to clean up the crypto space and position itself as a global Web3 hub.
Recent initiatives by the Securities and Futures Commission include:
New rules for crypto exchanges offering staking services (April 2025)
A roadmap to enhance compliance, market access, product diversity, and infrastructure (February 2025)
As crypto crime evolves, so too does Hong Kong’s commitment to staying ahead of the curve.